SOUTH AFRICA: FEBRUARY LABOR NOTES

UNCLAS SECTION 01 OF 02 JOHANNESBURG 000041 SIPDIS SIPDIS DOL FOR ILAB E.O. 12958: N/A TAGS: ELAB ECON PHUM SF SUBJECT: SOUTH AFRICA: FEBRUARY LABOR NOTES REF: CAPE TOWN 36 JOHANNESBU 00000041 001.2 OF 002 ¶1. Summary: Finance Minister Trevor Manuel announced in his February 20 budget speech that the amount of the child support grant would be increased to R220 per month and that eligibility would be extended up to age 15. The Treasury also plans to combine all social insurance into one mega-fund. COSATU's Central Executive Committee fired its President Willie Madisha, ostensibly about financial irregularities concerning a donation to the South African Communist Party. Mining company Goldfields announced it would shed 13 percent of its workforce over productions cuts forced on it by government-mandated reductions in electricity consumption and supply. Emigration of skilled labor from South Africa is rapidly increasing according to newspaper reports. Two accidents at ferromanganese smelters claimed seven lives in February. End Summary. Finance Minister Raises Amount of Child Support Grants and Increases Eligibility -------------- -------------- -------------- ¶2. Finance Minister Trevor Manuel announced in February 20 budget speech that the amount of the child support grant would be increased to R220 per month and that the age of eligibility would be extended up their 15 th birthday as of January 2009. The ANC policy document of January 2008 called for child support grants to be gradually extended up to age 18. However, the Treasury's estimates are that increased costs of the child support grant and old age pensions will add R12.5 billion to the budget over the next three years. In addition, the budget proposed higher expenditures on school infrastructure, early childhood development programs and tertiary education for a total for R121 billion expenditure our of a R716 billion budget. The budget also included a R9 billion conditional grant for school books and buildings and nutritional programs. Electricity Supply shortages cost jobs; Union threatens Strike -------------- -------------- -------------- ¶3. The decision by the South African government to limit the amount of power available to the mining sector in light of ongoing electricity supply problems is having repercussion on employment. Mining firm Goldfields announced on February 25 that it might cut up to 13 percent of its 53,000-strong workforce to meet the imposed 10 percent cut in power use. Many of the 6900 miners facing layoffs or early retirement are members of the National Union of Mineworkers, which reacted unsympathetically to the news and announced that it was considering a mass action to protest electricity shortages and associated job losses. Gold miner Harmony, according to newspaper Business Day, cut 5000 jobs between October-December ¶2007. It and other mining firms have so far not announced any additional layoffs. COSATU Rivalries Cause Shakeup -------------- ¶4. COSATU's Central Executive Committee (CEC),meeting in Braamfontein from February 25-27, unanimously resolved to fire its President Willie Madisha, a member and currently also president of the South African Democratic Teachers Union. Madisha got into hot water over the issue of unaccounted-for funding to the South African Communist Party (SACP),which Madisha claimed to have delivered to its General Secretary. Madisha, considered by some COSATU members to be close to President Mbeki, had also accused COSATU General Secretary Zwelinzima Vavi of credit-card misuse. An interim President is to be elected at the May CEC. COSATU's Education Secretary, Anthony Dietrich, told us that the imterim President was likely to be Sduomo Dlamini, a Swazi-born trade unionist coming from NEHAWU, the health care workers union. ¶5. Meanwhile, COSATU's Western Cape Provincial Secretary, Tony Ehrenreich, has been accused by his SACP provincial counterpart of pushing COSATU members closer to the Democratic Alliance, after Ehrenreich allegedly insisted that a COSATU event take precedence over a rally organized by the SACP. Ehrenreich, who has led a variety of events to draw attention to the plight of shack-dwellers, the poor and the jobless, was accused of being part of a "right-wing tendency." Unified Social Insurance Fund Planned -------------- -- ¶6. The Treasury's Budget Review statement contained a proposal to merge existing social insurance funds in order to achieve both administrative and financial economies. Currently, South Africa has separately administered funds which fall under the Social Welfare Department, the Labor Department, the Transport JOHANNESBU 00000041 002.2 OF 002 Department and the Health Department. The proposal will first be discussed in NEDLAC, the National Education Development and Labor Advisory Council. Industrial Accident Claims Six Lives -------------- ¶7. Six workers died in an explosion at the Assmang ferro-manganese smelter in Cato Ridge on Sunday, February 24. A furnace explosion sufficiently powerful to knock out the wall separating it from the control room killed one worker on impact and left others with burns sufficiently severe to result in their deaths at the hospital. Other workers remain hospitalized and the death toll may rise further. The chief executive of the ferrous division of African Rainbow Minerals said that the furnace would be out of commission for the following six months, though other parts of the plant would resume operations as soon as workers were convinced it was safe to return to work. Assmang has already been under investigation by the Department of Labor for ongoing workplace health violations, as several workers have recently died of manganese poisoning. ¶8. An explosion related to a converter at the Samancor ferrochrome smelter in Witbank also killed one worker on February 17. Newspaper Reports that Skilled Labor Leaving South Africa -------------- -------------- -------------- ¶9. Daily newspaper "the Star" reported in its February 11 edition that skilled labor was leaving South Africa. The paper claimed that South Africa ranked as the fifth largest supplier of skilled immigrants to New Zealand and Australia, with migrants with a mining background being actively recruited to work in Australia. The Star cited Ian Petty, the chairperson of the Professional Movers Association, as saying that currently three containers of household effects were being exported for everyone imported, compared to a one-to-one ratio a year ago. Petty said that inquiries about services were soaring. The paper also quoted a service advisor at the British council offices who commented that they had received a massive increase in the number of candidates wanting to write the English language tests required of potential migrants to the UK, Canada, Australia and New Zealand. (Note: Consulate has been told that the South Africa Statistical Service does not keep records on emigration. End Note.) COFFMAN